3 Executive Summary Applied Energy Group, Inc. ( AEG ) was retained by Black Hills/Colorado Electric Utility Company, LP d/b/a Black Hills Energy ( Black Hills or Company ) to conduct an energy efficiency potential assessment and design the 2016 through 2018 Energy Efficiency (Demand Side Management) Program Portfolio ( DSM Plan or Plan ). As part of the Potential Assessment, technical, economic and achievable potential were utilized to determine the total potential savings that could be achieved through the installation of energy efficiency measures. The technical potential assessment evaluates the potential of all efficiency technologies and design practices, unconstrained by budgets or measure cost effectiveness. The economic potential assessment screens the list of potential efficiency measures, from the technical potential assessment, for cost-effectiveness according to societal cost effectiveness tests. Achievable potential is the maximum amount of energy savings from efficiency measures that can realistically be achieved in response to one or more of the following conditions: The existence of real-world barriers with a need to encourage consumers to adopt energy efficiency measures; The most aggressive program scenario possible, including rebates and incentives; and Inclusion of comprehensive program costs including administration, marketing, data collection and tracking, and monitoring and evaluation. Black Hills developed its energy efficiency program portfolio for 2016 through 2018 through a comprehensive planning process, including a comprehensive benefit-cost analysis of a wide range of measures that affect electricity consumption across all customer classes. The Black Hills Plan is divided into three broad program categories based on customer sector residential, commercial and industrial, and special programs. The residential, commercial and industrial programs provide a variety of energy efficiency opportunities for residential customers, small and large commercial customers, and industrial customers. Special programs target lowincome residents, and education in schools. The program portfolio is detailed in the table below by program by category. i P age

4 TABLE ES1: ENERGY EFFICIENCY PORTFOLIO SUMMARY Residential Energy Efficiency Programs High Efficiency Lighting Point-of-purchase incentives for CFLs and LEDs. Appliance Recycling Incentives for recycling older, inefficient refrigerators, freezers, or room air conditioners. On-Site Energy Evaluation The program consists of two levels. Level 1. Evaluation and Direct Install Level 2. In-Depth Evaluation, Direct Install and Incentives (air sealing, insulation and duct sealing) High Efficiency Cooling Rebates to purchase and install heat pump water heaters, central air conditioners, heat pumps and evaporative coolers. Home Energy Comparison Reports Behavior program utilizing customized energy reports. Online Home Energy Evaluation Online energy evaluation tool. Commercial and Industrial Energy Efficiency Programs C&I New Construction Incentives for the design and construction of LEED certified new buildings. C&I Custom Rebates for cost-effective non-prescriptive measures/equipment. C&I Prescriptive Rebates for the purchase and installation of pre-qualified measures, including HVAC, motors and refrigeration. C&I Lighting The program is comprised of two components: Prescriptive Lighting. Standardized prescriptive rebates customers that purchase and install qualifying lighting measures. Small Business Direct Install Lighting. Small commercial customers receive free evaluation and incentives that cover up to 70% of the equipment and installation. Special Programs Low Income Assistance Program Qualifying customers receive: Lighting, refrigerators, and evaporative coolers at no cost. Evaluation and direct install of measures at no cost. School Education Program School children receive energy kits, plus education and information on how they can help parents save energy. ii P age

5 DSM Plan 1. Introduction Black Hills is pleased to present this Energy Efficiency Program Portfolio to the Public Utilities Commission of the State of Colorado ( Commission ) for years 2016 through This Plan follows the previous two program cycles rolled out by Black Hills in 2009 and House Bill , Concerning Measures to Promote Energy Efficiency, and Making an Appropriation Therefore, was passed by the Colorado General Assembly and signed into law by Governor Ritter in 2007, and codified in relevant part at (5), (6) and (7), C.R.S., as well as and 104, C.R.S. The bill establishes that: cost-effective natural gas and electricity demand-side management programs will save money for consumers and utilities and protect Colorado s environment. The general assembly further finds, determines, and declares that providing funding mechanisms to encourage Colorado s public utilities to reduce emissions or air pollutants and to increase energy efficiency are matters of statewide concern and that the public interest is served by providing such funding mechanisms. Such efforts will result in an improvement in the quality of life and health of Colorado citizens and an increase in the attractiveness of Colorado as a place to live and conduct business. 1 Section (2), C.R.S., further charges the Commission to: establish energy savings and peak demand reduction goals to be achieved by an investor-owned electric utility, taking into account the utility s cost-effective DSM potential, the need for electricity resources, the benefits of DSM investments, and other factors as determined by the commission. The energy savings and peak demand reduction goals shall be at least five percent of the utility s retail system peak demand measured in megawatts in the base year and at least five percent of the utility s retail energy sales measured in megawatt-hours in the base year. The base year shall be The goals shall be met in 2018, counting savings in 2018 from DSM measures installed starting in The commission may establish interim goals and may revise the goals as it deems appropriate. Therefore, the Commission is tasked with ensuring that utilities develop and implement DSM programs that give customers an opportunity to participate, and consider the impact on nonparticipants and low income customers. The Company s energy-efficiency portfolio is composed of three broad categories: residential programs, commercial and industrial programs and special programs. Each program has been designed to address the needs of various customer types. The residential programs include lighting, , C.R.S. 1 P age

6 appliance recycling, high efficiency cooling, energy evaluation, home energy reports, and online evaluations. The commercial and industrial programs include new construction, prescriptive rebates, lighting, and custom rebates. The special programs include those targeted at low-income homes and education in schools. In conjunction with the DSM Plan, Black Hills completed a comprehensive potential study, contained in a separately filed document titled Demand Side Management Potential Study. 2. General Program Design Approach The Black Hills DSM Plan is based upon the combination of Black Hill s existing energy efficiency portfolio, the potential study, and a multi-criteria program development selection approach. Criteria included the potential study, analysis of other utility programs, costeffectiveness, and stakeholder input. The two tenets that guide the design of Black Hill s programs are: The service territory benefits from energy efficiency programs. As part of the overall strategy for meeting the needs of its customers, cost-effective energy-efficiency programs offer an alternative to the construction of infrastructure and purchase of fuel for generation. Black Hills customers benefit from energy efficiency programs. Energy efficiency can result in lower energy bills, immediately reducing program participant s consumption of electricity. Furthermore, the programs are designed to be inclusive, giving all customers the opportunity to benefit from participating in Black Hill s energy efficiency programs. The Plan s design adhered to a comprehensive planning process. Whenever possible, the portfolio leverages existing resources to ensure comprehensive, cost-effective programs. The DSM Plan includes twelve energy efficiency programs administered by Black Hills. a. Ability to Meet Commission Goals The Black Hills program portfolio uses a combination of education, contractor training and customer incentives to advance energy efficiency in Colorado. To achieve the Commission s savings goals, it is important that the programs save energy and peak demand over the short- and longterm. The programs have been designed to maximize participation given best practice marketing and incentive designs. In addition to ensuring participation while efficiently utilizing budget resources, incentives have been targeted to promote the adoption of qualifying Energy Efficiency Measures that maximize savings. 2 Educating customers and trade allies on the benefits of energy efficiency can speed the adoption of energy efficient measures and promote the market transformation. This is a longer-term strategy of 2 Energy Efficiency Measures are more efficient models of end-use appliances, such as central air conditioners or compact fluorescent lighting, or technological improvements that can make an end-use appliance more efficient in its use of energy (e.g. energy management systems). Energy Efficiency Measures that qualify for each program represent a substantial improvement over the standard efficiency model available on the market. 2 P age

7 achieving savings with the end goal of market transformation. However, education complements the short-term strategy of offering rebates to achieve more immediate energy and demand savings. b. Program Participation and Eligibility Program eligibility has been defined broadly to make programs as inclusive as possible. For most residential programs, eligible participants include customers living in every type of residential structure, including single-family, multi-family and manufactured homes. For specific programs, customers who have recently participated in a Black Hills program may be limited because repeated participation would not render sufficient savings to justify the expense. 3 In general, participation guidelines are designed to include all customer sectors and end uses. c. Customer and Trade Ally Engagement Customer incentives are the primary mechanism for program delivery. Customers receive rebates to purchase energy efficient equipment and services through existing market actors, including contractors, equipment dealers and retailers. To achieve the portfolio s long-term savings goals, it will be necessary for Black Hills to engage customers, trade allies, and state and local agencies. Targeting trade allies and leveraging the Company s relationships with stakeholders will increase program awareness and promote the market adoption of high efficiency equipment/systems. Marketing components of several programs include strategies to engage trade allies as well as state and local agencies. In some programs, portions of the budget have been reserved for training and informational outreach activities with trade allies. These activities are intended to keep key trade allies apprised of program changes, allowing them to better assist customers and ensure they maintain high-efficiency equipment in their stock. Marketing and informational outreach activities are also aimed at customers, including the children of residential electric customers through targeted school programs. Creative and sustained marketing is important to a successful and robust energy efficiency program portfolio. 3. Benefit-Cost Analysis and Screening Inputs To determine the Black Hills portfolio of energy efficiency measures, a comprehensive benefit-cost analysis was conducted on a wide range of measures that affect electricity consumption across all customer classes. Black Hills uses the Colorado Modified Total Resource Cost Test (mtrc) as the primary method of assessing the cost-effectiveness of energy efficiency measures and programs. The mtrc test is a widely-accepted methodology that has been used specifically in Colorado to assess costeffectiveness. The mtrc measures the net costs of an energy efficiency program as a resource option based on the total costs of the program, including both the participant and the utility costs. This test represents the combination of the effects of a program on both participating and nonparticipating customers. 3 For example, if a customer recycled their primary refrigerator in 2015, they would not benefit from recycling a new refrigerator in P age

8 There are four other tests that analyze cost-effectiveness from different perspectives: Participant Cost Test: quantifies the benefits and costs to the customer due to participation in a program. The benefits include reduction in the participant s bill and incentives received. The costs are out-of-pocket expenses incurred as a result of participation. Ratepayer Impact Measure Cost Test: measures what happens to a customer s bill or rates due to changes in utility revenues and operating costs. Benefits are the savings from avoided supply costs of energy and demand. Costs are the program costs incurred by the utility, participant incentives, and decreased utility revenues. Utility Cost Test: measures the net costs of a program as a resource option based on the costs incurred by the program administrator, excluding any net costs incurred by the participant. The benefits are the avoided supply costs of energy and demand. The costs are the program costs incurred by the utility and participant incentives. Societal Cost Test: is a variant of the mtrc, intended to determine the effects of a program on society as a whole. The benefits are the avoided supply costs of energy and demand as well as externalities (including environmental benefits, etc.). The costs are the program costs incurred by the utility and the participants. The benefit-cost screening model has been adapted from Minnesota Office of Energy Security BenCost software and is consistent with the California Standard Practice Manual. The benefit-cost tests were performed using utility-specific data. The input data required for the model includes: TABLE 1: BENEFIT-COST MODEL INPUTS General Inputs Retail Rate ($/kwh) Commodity Cost ($/kwh) Demand Cost ($/kw-year) Environmental Externality Cost ($/kwh) Discount Rate (%) Growth Rate (%) Line Losses (%) Project-Specific Inputs Utility Project Costs (Administrative & Incentives) Direct Participant Project Costs ($/Participant) Project Life (Years) kwh/participant Saved (Net and Gross) kw/participant Saved (Net and Gross) Number of Participants Savings estimates for individual measures or programs were developed using a variety of sources. Colorado-specific data was utilized where available, with regional and national data filling the information gaps. Impacts were calculated using generally accepted engineering algorithms based on a set of reasonable assumptions. Because of the diversity in equipment and energy consumption patterns across multiple building types and end-uses, there exists a variability in these savings estimates as they relate to program design and target markets, particularly at the planning stage of these programs. 4 P age

9 DSM Plan Programs The composition of the DSM Plan is based upon the combination of Black Hill s existing energy efficiency portfolio, the potential study, and a multi-criteria program development selection approach. AEG updated measure inputs utilizing Black Hill s program evaluations, historical program achievements, United States Department of Energy (DOE) federal standards and ENERGY STAR standards, as well as others. Recent changes to the DOE federal appliance standards have significantly impacted the savings potential of a number of appliances, including, but not limited to, the following residential measures: Room Air Conditioners Refrigerators Freezers Dishwashers Air Source Heat Pumps Lighting Clothes Washers Program modifications and new programs were considered to achieve the Commission s goals and provide all Black Hills customers with access to cost-effective energy efficiency programs. a. Black Hills DSM Plan Portfolio Budgets and Goals The Black Hills Plan is divided into three broad program categories based on customer sector residential, commercial and industrial, and special programs. The residential programs provide a variety of energy efficiency opportunities for residential customers. The C&I programs provide a range of energy efficiency opportunities for both small and large commercial and industrial customers. Special programs target low-income residents and provide education on energy efficiency to middle school aged children and their parents. The table below summarizes the Plan being proposed, segmented by sector. 5 P age

10 TABLE 2: DSM PLAN SUMMARY Residential Energy Efficiency Programs High Efficiency Lighting Point-of-purchase incentives for CFLs and LEDs. Appliance Recycling Incentives for recycling older, inefficient refrigerators, freezers or room air conditioners. On-Site Energy Evaluation The program consists of two levels. Level 1. Evaluation and Direct Install Level 2. In-Depth Evaluation, Direct Install and Incentives (air sealing, insulation and duct sealing) High Efficiency Cooling Rebates to purchase and install heat pump water heaters, central air conditioners, heat pumps and evaporative coolers. Home Energy Comparison Reports Behavior program utilizing customized energy reports. Online Home Energy Evaluation Online energy evaluation tool. Commercial and Industrial Energy Efficiency Programs C&I New Construction Incentives for the design and construction of LEED certified new buildings. C&I Custom Rebates for cost-effective non-prescriptive measures/equipment. C&I Prescriptive Rebates for the purchase and installation of pre-qualified measures, including HVAC, motors and refrigeration. C&I Lighting The program is comprised of two components: Prescriptive Lighting. Standardized prescriptive rebates customers that purchase and install qualifying lighting measures. Small Business Direct Install Lighting. Small commercial customers receive free evaluations and incentives that cover up to 70% of the equipment and installation. Special Programs Low Income Assistance Program Qualifying customers receive: Lighting, refrigerators, and evaporative coolers at no cost. Evaluation and direct install of measures at no cost. School Education Program School children receive energy kits, plus education and information on how they can help parents save energy. The tables below summarize the DSM Plan budgets, participants, energy and demand savings, and mtrc ratios. Detailed benefit-cost analysis modeling results are available in Appendix A. 6 P age

14 TABLE 9: DETAILED PROGRAM SAVINGS AND PARTICIPANTS FOR 2018 Program Name Participant Demand Savings Goals (kw) Energy Savings Goals (kwh) High Efficiency Lighting 137, ,714,740 Appliance Recycling ,370 On-Site Energy Evaluation 1, ,915 High Efficiency Cooling ,908 Home Energy Comparison Report 24, ,233,521 Online Home Energy Evaluation 2, ,297 C&I New Construction ,413 C&I Custom ,486,340 C&I Prescriptive ,792 C&I Lighting 209 1,022 3,454,517 Low-Income Assistance 1, ,551 School Based Energy Education 2, ,620 Total Program 170,606 4,034 14,943,984 The following sections contain detailed program descriptions of the proposed energy efficiency programs. Each description contains the following components: Program objective, target market and description. Implementation strategy, including delivery channels, education and outreach. Eligible measures and incentive levels. participation. energy savings and demand reductions. program budgets. Cost-effectiveness. b. Evaluation, Measurement, and Verification of Programs Evaluation, measurement, and verification (EM&V) of programs will be performed on a three-year rotating schedule. That is, each program and sub-program will be analyzed to determine the extent to which implementation is achieving the desired goals(s) at some point during the life of the Plan. The schedule for EM&V for each program is: 10 P age

15 TABLE 10: EM&V SCHEDULE Program Name Sector Proposed EM&V Year Low-Income Assistance Residential 2016 On-Site Energy Evaluation Residential 2016 Home Energy Comparison Report Residential 2016 Appliance Recycling Residential 2016 C&I Lighting Non-residential 2017 C&I Custom Non-residential 2017 C&I Prescriptive Non-residential 2017 High Efficiency Cooling Residential 2017 C&I New Construction Non-residential 2018 School Based Energy Education Residential 2018 High Efficiency Lighting Residential 2018 Black Hills will file the EM&V reports with the Commission in this proceeding no later than April 1 of the year following the Proposed EM&V Year The principal purpose of comprehensive program evaluations is to assess customer satisfaction with the program being evaluated, assess changes that should be made to technical assumptions, including but not limited to, net-to-gross (NTG) ratios, assess overall program cost effectiveness, and assess program processes based on the evaluator s own research as well as a thorough review of industry-wide and the Company s own technical assumptions. The Company will consider implementing recommended changes in the program year following the period of evaluation. These changes will not be backward looking and so shall not affect calculations, including calculations for achieved savings or net economic benefits, for the Plan year covered by the EM&V. Black Hills will, within thirty days after the annual filing of the EM&V, provide 30-Day and/or 60-Day Notice, as applicable, detailing which EM&V recommendations will be implemented. c. Budget Flexibility Budget flexibility is important in order to effectively implement programs over multiple program years to meet energy savings targets. Black Hills will, during each Plan year, have the flexibility to move budget dollars between programs and customer segments within the Plan without further Commission authorization and approval, so long as the Company does not incur costs in excess of 115 percent of the applicable overall annual budget amount. This flexibility allows Black Hills to focus on achieving energy savings targets across the entire portfolio. 11 P age

16 d. Residential Programs Residential High Efficiency Lighting Program Objective Target Market Description Program Goals Implementation Strategy Measures & Incentives Increase the penetration of efficient lighting in customer homes by providing incentives for the purchase of ENERGY STAR qualified lighting. Residential customers, lighting manufacturers and local retailers. ENERGY STAR qualified CFLs and LEDs use up to 75% less energy than typical incandescent light bulbs. They also offer superior performance by lasting up to 10 times longer than incandescent bulbs, reducing the need to change hard-to-reach light bulbs. Customers may purchase up to 12 CFLs and 5 LEDs from local participating retailers at a reduced cost. Instant incentives are available at participating stores at the time of purchase. Incentives vary depending upon the product, retail location and associated retail cost. Help residential customers reduce their electricity bills. Educate customers about the program and the benefits of installing CFLs and LEDs. Develop partnerships with retailers to market the program and benefits of energy efficient lighting. Demonstrate persistent energy savings and provide other benefits to end-users such as improved health, safety, and comfort. Effectively install efficient lighting through the Black Hills Program. Encourage energy saving behavior and awareness. Black Hills will engage an implementation contractor to: Establish relationships with lighting manufacturers and retailers throughout Black Hills service territory. Provide in-store promotional materials and retail sales staff training. Track program performance, including tracking sales data, reviewing sales data for accuracy and payment to retailers. Periodically report progress towards program goals and opportunities for improvement. Black Hills marketing staff will work with the implementation contractor to market the program. Marketing tactics will include bill inserts, advertisements, and partnerships with participating retailers. Eligible Measure Incentive per Unit Standard CFL $0.90 Specialty LED $5.00 Standard LED $ P age

18 Residential Appliance Recycling Program Objective Target Market Description Program Goals Implementation Strategy Measures & Incentives Promote the retirement of old, inefficient appliances. Residential customers disposing of primary or secondary inefficient refrigerators, freezers, or room air conditioners. The program encourages residential customers to turn in their old inefficient refrigerators, freezers and room air conditioners, removing them from the electric system and disposing of them in an environmentally safe and responsible manner. Program requirements to recycle a refrigerator or freezer include: Unit must be between 10 and 30 cubic feet in size. Unit must be in working condition. At time of pickup the unit must be empty and plugged into an electrical outlet. The appliance must have a clear path for removal. Units using ammonia or SO2 refrigerant are excluded from participation. Unit can be primary or secondary. Customers may recycle their old room air conditioners free of charge during a scheduled pick-up for a qualifying refrigerator/freezer. The recycled unit must be working at the time of pick-up. Customers are limited to two (2) refrigerator and freezer rebates and three (3) room air conditioners per household per year. Educate customers about the energy and environmental benefit of recycling their inefficient appliances. Increase customer awareness of Black Hills energy efficiency programs. Reduce household energy consumption. Influence consumer behavior by encouraging residential customers to avoid replacing their second refrigerator or freezer after it is recycled. Black Hills will work with an implementation contractor to: Schedule pickups from customer homes, verify appliance qualification, and remove appliance(s) from customer homes. Process rebates. Track program data. The implementation contractor will work with Black Hills to develop marketing strategies and materials. Marketing activities may include bill inserts, print and electronic advertisements, television and radio advertisements, media and community events, and direct mail. Eligible Measure Unit Incentive per Unit Refrigerator Recycle per unit $50 Freezer Recycle per unit $50 Room A/C Recycle per unit $50 14 P age

20 Residential On-Site Energy Evaluation Program Objective Target Market Description Program Goals Implementation Strategy Encourage whole house improvement to existing homes. Residential customers that own or rent a residence. The program consists of: Level 1. Customers receive a home energy evaluation and direct installation of lowcost measures at no cost. The evaluation identifies potential efficiency improvements, educates the customer on managing energy costs and provides information about Company programs. The low-cost measures that may be installed include: faucet aerator, low-flow showerhead, water temperature setback, hot water pipe insulation and CFLs. Level 2. Customers pay $100 to receive a home energy evaluation with a blower door test. The evaluation identifies potential efficiency improvements, educates the customer on managing energy costs and provides information about Company programs. Low-cost measures will be installed at no cost to the customer. The measures that may be installed include: faucet aerator, low-flow showerhead, water temperature setback, hot water pipe insulation and CFLs. Customers are eligible to receive incentives for the purchase and installation of air sealing, insulation and duct sealing. Customers must have a second blower door test, verifying the savings, to receive an incentive for air sealing or duct sealing. Homeowner advisory services (concierge services) will be offered to homeowners on an as-needed basis. If the homeowner identifies that they need additional assistance, the auditor will spend up to 1.5 hours discussing energy efficiency options, equipment, and potential costs and savings. The number of hours per customer will vary, but will not exceed 1.5 hours. The discussion may take place via telephone, internet or telephone, based upon customer location, budget, and other constraints. Energy evaluations are limited to homes 10 years or older. Demonstrate persistent energy savings and provide other benefits to end-users such as improved health, safety, and comfort. Encourage energy saving behavior and whole house improvements. Help residential customers reduce their electricity bills. Black Hills will work with a third-party implementation contractor to: Hire/sub-contract local staff to perform home evaluations, blower door test, direct measure installation and advisory services. Engage customers and schedule home evaluation appointments. Provide customer service support and advisory services. Process rebate applications, including review and verification of applications and payment of customer rebates. Track program performance. Marketing activities may include bill inserts, newspaper advertisements, direct mail, bill messaging, radio advertisements, and community events. 16 P age

27 Residential Online Home Energy Evaluation Objective Target Market Description Program Goals Implementation Strategy Measures & Incentives Participation Savings Encourage energy education. All residential customers. The program provides online evaluations to customers to help them understand how they use electricity and what opportunities they have to reduce their electricity use. Information about measures such ENERGY STAR products, heating and cooling equipment, weatherization materials, lighting and other end use products will be offered online. The program will also provide links to other Company residential energy efficiency programs. Customers that complete an online evaluation will receive a free energy saving kit. The kit may include: faucet aerator, low-flow showerhead and CFLs. Increase awareness of energy efficiency and energy use in the home. Educate residential customers about the benefits of energy efficiency and the opportunities to reduce energy consumption. Increase awareness of and participation in Black Hills energy efficiency programs. Support the use of the internet as a source of education and resources on energy efficiency. The program may be marketed through bill inserts and other media, as well as online through BHE s website. The online tool and energy saving kit are offered to customers for no charge. 2,000 2,000 2,000 Net Energy and Demand Savings Goals Eligible Measure Net Savings Annual Net Savings Goals per Customer Net Energy Savings Goals (kwh) , , ,297 Net Demand Savings Goals (kw) Budget Cost- Effectiveness Budget Categories Incentives $0 $0 $0 Administration $4,600 $4,600 $4,600 Marketing $4,600 $4,600 $4,600 Delivery $92,000 $92,000 $92,000 Total $101,200 $101,200 $101,200 mtrc Test RIM Utility Societal Participant Test Cost Test Cost Test Cost Test n/a 23 P age

28 e. Commercial and Industrial Programs C&I New Construction Program Objective Target Market Description Promote energy-efficiency in new construction and major renovation projects. Commercial and industrial customers and builders for new construction and major renovations. The program encourages customers and builders to incorporate energy efficiency into new construction and major building renovations. Customers can follow one of four tracks: Track I. Targets small commercial buildings, between 5,000 and 15,000 square feet in size, that are primarily design or construction. Buildings must achieve 15% savings over IECC code. Track II. Targets buildings larger than 15,000 square feet that are straightforward in design and may be on a faster design schedule. Track II provides evaluation of efficiency options of one type of mechanical system solution. Buildings must achieve 15% savings over IECC code. Track III. Targets buildings larger than 15,000 square feet that have energy savings goals in mind and time to integrate new ideas and strategies into the design. Buildings are typically modeled to achieve energy savings of 30 to 40% greater than IECC code. Track IV. Track IV offers incentives and assistance to help building owners or developers achieve energy savings of 40 to 60% better than current IECC code. The track also provides technical and certification support for participants to meet the requirements of LEED, ENERGY STAR, EPAct, 2030 Challenge and other initiatives. Customers are eligible for design and construction incentives: Design Incentives. BHE s independent energy design consultant facilitates design team planning of various energy-saving strategies. Incentives are provided to the owner s team of professionals to help offset expenses associated with program participation. The design team payment is a one-time lump sum amount paid to the design team lead and based on the program track. Construction Incentives. Must achieve a minimum energy savings of 15% higher than IECC code. Incentives are paid upon receipt of the final energy verification report. Incentives cannot reduce overall payback to less than one year. Customers cannot receive incentives for these measures through other energy efficiency programs offered by BHE. Track Design Incentive Construction Incentive I $1,000 $ /kWh II $3,500 $ /kWh III $5,500 $ /kWh IV $6,500 - $8,500 $ /kWh 24 P age

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